You might be thinking that there is no good side to a pandemic. However, you wouldn’t be thinking that if you were a product manager who works for the stationary bike company Peloton. Their sales have shot up as more and more people were forced to stay home and could no longer go to the gym to exercise. Their pricy bikes seemed to fill a need in people’s lives. However, all good things have to come to an end. When the pandemic is over, how are these product managers going to keep a good thing going?
Everybody Starts To Exercise At Home
Peloton’s stationary bikes and remote fitness classes have been in high demand since the Covid-19 coronavirus pandemic began. All of sudden the gyms closed and millions of people who still wanted to exercise were cooped up at home. Product managers at Peloton were thrilled when orders for new bikes surged, and Peloton changed their product development definition and stopped most advertising for several months as it struggled to fulfill the demand for its products. As the pandemic wore on, wait times for new bikes reduced, while orders remained up. The benefit of the pandemic is that the company was able to report its first quarterly profit. What made things even better for the Peloton product managers was that the number of $39-a-month connected-fitness reoccurring subscriptions for owners of Peloton bikes and treadmills more than doubled. This would look good on anyone’s product manager resume. The product manager’s challenge then became to figure out how to sustain that growth as gyms in parts of the country reopened.
The product managers at Peloton realize that there are over 180 million people around the globe who pay monthly for access to a gym. Currently Peloton only has 3.1 million members on their platform today. What this means is that they believe that they have a tremendous runway for growth. Thanks to the pandemic, the product managers think there’s a fairly large percentage of the population who are unlikely to, or who may not ever, return to a gym. What this means for the product managers is that it’s important to continue growing their connected-fitness memberships as quickly as they possibly can to keep their first-mover advantage.
When you are selling a stationary bicycle that people can use in their homes, you are competing with people that use your product who also have gym memberships. However, the product managers believe that that percentage has declined from about 60% of their members two years ago to less than 40% today. The Peloton product manager’s plan is to aggressively grow different fitness offerings. They hope to continue to add more value to the connected-fitness subscription. An example of what they are trying to do can be seen in their recent announcement of the addition of Barre [a ballet-inspired fitness workout]. The product manager’s goal is that over time they can eliminates any need for their members to need anything else other than their Peloton connected-fitness memberships.
Preparing For The Future
One issue that the product managers need to remain aware of are gym reopenings slowing down their growth? The product managers do want everyone to return to normal and this means for all businesses to reopen, including gyms. They are not that concerned about the completion that gyms represent because the fitness market is massive and has room for many players. Their hope is that there is room for both bricks and mortar and connected fitness online. Well before the Covid-19 pandemic, the Peloton product managers believed that streaming digital media was shifting. They believed that shift was also going to happen in the fitness industry as more exercise moved into the home. During the pandemic people had to suspend or cancel their gym memberships and build new habits at home. In order to keep them engaged, the Peloton product managers continue to add new content and programming.
The good news for the product managers is that even where gyms have reopened, they’re still seeing significant demand for their products. Many outsiders saw Peloton as a Covid-19 story; however, the pandemic just accelerated trends that were already there. In order to win in global connected fitness, the Peloton product managers have to win in cardio. Additionally, they have to win in strength training. Both of these areas are the two pillars within fitness. In order to accomplish this, Peloton has been introducing new products. The product managers now have a “better, best” portfolio in bikes. They also have plans to create a “better, best” portfolio of treadmills.
However, the Peloton product managers are planning on being very careful. They won’t be launching dozens of new products. Instead, they’re going to have a very pruned portfolio of cardio equipment that stands the test of time, things that people have been doing for a long time. For strength, the product managers are planning on turning more to their digital content. For this product it is unlikely to require heavy investments in any hardware. The thinking is that most of what a customer needs to do strength training is either their own body weight, or a set of free weights or resistance bands. The product managers think if they can win both cardio and strength then that will ultimately pull people out of the gym and fully into the home where they can use Peloton products.
What All Of This Means For You
The Covid-19 pandemic caused a revolution to happen in the home fitness market. The product managers at Peloton stationary bikes were originally caught off-guard by a surge in orders but were then able to quickly start to deliver the products that customers had ordered. The challenge that is now facing them is that as gym start to reopen, can they use their product manager job description to continue to keep the customers that they have while gaining even more customers?
The product managers at Peloton believe that they have a great opportunity to capture gym members who want to start working out from home. The product managers realize that they are competing with gym memberships and so they are actively working to distinguish their product from the gym experience. As gym reopen, the product managers are not that worried because they believe that the fitness market is large enough to support both gyms and their product. The product managers believe that they have to capture customers in both the cardio and strength training areas. The Peloton product managers are releasing more products, but they are not planning on releasing too many new products.
Having a pandemic suddenly cause customers to start to come flocking to your product is something that no product manager could have predicted. However at Peloton this is exactly what happened. Now that the pandemic is going away, the product managers have the challenge before them of finding ways to both keep their existing customers and finding ways to continue growing their business. If the new products and services that they introduce allow customers to continue to enjoy working out from home, then they will probably be able to continue to be successful. We’ll have to watch and determine if Peloton is truly a pandemic success story.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: Do you think that the Peloton product managers should encourage their customers to drop their gym memberships?
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What We’ll Be Talking About Next Time
Once upon a time, being a product manager for a strip mall was a pretty good job. Your mall was a mecca for the local population and so it was easy to attract customers and all your product development definition said that you had to do was make sure that each of your stores was leased out. However, times have changed. As more and more people start to do their shopping from home, the need to go out to the mall has gone away. Strip malls have fallen on hard times. However, some may be starting to make a comeback. How can strip mall product managers breathe new life into their products?